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Highlights
- Bitcoin CAGR returns have dropped in 4-year cycle as big money comes into the asset class.
- Bitcoin's transition to a macro asset began in 2020 with institutional and sovereign accumulation, says Willy Woo.
- Willy Woo believes that BTC will gradually absorb capital until its CAGR stabilizes around 8%.
- Following Moody’s downgrade of U.S. credit ratings, Bitcoin has demonstrated relative strength,
Amid calls of Bitcoin price rally to $500K and $1 million by 2030, maximalist Willy Woo said that on a realistic basis, BTC’s compounded annual growth rate (CAGR) will drop under 10%, from the current 40%. Woo’s projections come from historical data, setting up some realistic expectations. He explains how BTC is gaining prominence as a global macro asset.
Willy Woo Explains Why Bitcoin CAGR Will Drop In the Next Decade
Prominent analyst Willy Woo has offered insights into Bitcoin’s Compound Annual Growth Rate (CAGR), highlighting a shift in its growth dynamics over recent years. Woo explained that Bitcoin’s explosive growth phases, like the 100%-plus CAGR seen before 2017, are now part of its history.
Woo further stated that 202 was a pivotal year as it became institutionalized, and corporations and sovereign entities began to accumulate the assets. Furthermore, with the arrival of spot BTC ETFs in January 2024, institutional exposure to BTC has shot up significantly. BlackRock’s iShares Bitcoin Trust (IBIT) has seen massive inflows of over $45 billion since its inception, making it the top-ranking ETF in the market.
This institutional adoption, however, coincided with a drop in CAGR from over 100% to the 30-40% range, which continues to trend downward as BTC evolves into a macro asset. Willy Woo added that BTC is the first new global macro asset in 150 years, explaining that it will steadily absorb capital until reaching equilibrium.
He projects the CAGR to eventually stabilize around 8%, aligning with global monetary expansion (5%) and GDP growth (3%).
“Until then, maybe 15-20 years away, enjoy the ride because almost no publicly investable product can match BTC performance long term, even as BTC’s CAGR continues to erode,” Woo concluded.
Will BTC Thrive After US Credit Ratings Downgrade?
Last week, Moody’s downgraded US Credit ratings, citing the massively rising debt payments and the growing fragility in the US economy. Market analysts believe that with BTC price just 4% away from its all-time high, the asset is showing greater relative strength.
The Kobeissi Letter noted: “As the US Dollar weakens and uncertainty rises, Bitcoin and Gold are thriving. Instability is Bitcoin’s best friend.”
On the other hand, Bloomberg Commodity Strategist Mike McGlone has highlighted the BTC-to-gold ratio as a key indicator for market trends. Despite BTC showing signs of crowd-driven buying following the U.S. presidential election, the BTC-to-gold ratio remains steady at approximately 32x, unchanged since 2021. As of now, the BTC price continues to flirt around $103,500, while failing to deliver a weekly close above the crucial resistance of $105K.
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